Remuneration to the Board and senior executives

Principles for remuneration and benefits

A director’s fee is paid to the Chairman and members of the Board as decided by the Annual General Meeting. No director’s fee is paid to employees of the Group or to employee representatives. Remuneration for the President and CEO and other senior executives is made up of a base salary, variable remuneration, other benefits and a pension. Other senior executives are individuals who, together with the President and CEO, constitute Group management.

In 2018, Group management comprised four individuals, in addition to the President and CEO. They are Executive Vice President and CFO Per-Ola Holmström, President of Medical Solutions Johan Iveberg, President of Integrated Solutions Jörgen Karlsson and President of Industrial Solutions Johan Arvidsson.

Any assignment taken on by individual Board members on behalf of the company in addition to Board work is remunerated at market rates. Assignments should be documented in agreements specifying the type of assignment and agreed remuneration. Remuneration is paid in arrears on completion of the assignment.

 

Preparatory and decision-making procedure

The Board of Directors has appointed a Remuneration Committee, consisting of the Chairman of the Board and one other Board member. The committee has proposed, and the Board of Directors has approved, the current principles for variable remuneration. The committee has made decisions on all remuneration and benefits for the President and CEO, which have been presented to and approved by the Board. The committee has approved the remuneration of Group management.

 

Bonuses

Bonuses paid to the President and CEO and other senior executives are based on the outcome of profit and return on capital employed. The maximum outcome is 50% of base salary for the CEO and 40% for other senior executives. At the same time, the relevant profit centre must report positive. In 2018, the outcome for the President and CEO was 50% of base salary (50) and for senior executives it was 20–40% of base salary (24–40).

Participants in Nolato’s three incentive programmes are offered the opportunity to receive a bonus payment corresponding to half of the participant’s warrant premiums and the income tax charged on such bonus payment, provided that the participant’s employment at the company does not cease before three years have elapsed from 1 November 2016, 2017 and 2018.

 

Incentive programmes

At an extraordinary general meeting on 5 December 2016, an issue was approved of a maximum of 798,000 share warrants in three different series: 2016/2019 (Series 1), 2017/2020 (Series 2) and 2018/2021 (Series 3), with 266,000 warrants in each series granting the right to subscribe for as many B shares. Each warrant thus entitles the holder to subscribe for one (1) new B share. The programme was offered to some twenty individuals within Nolato’s management. The maximum dilution effect of all of the incentive programmes’ three series is expected to amount to a total of approximately 3% of share capital and 1.6% of votes (calculated based on the number of existing shares), assuming full subscription and full exercise of all warrants.

 

Series 1 Incentive Programme (2016/2019)

Total subscribed warrants amounted to 240,500 and the price per warrant was SEK 7.40. The issue price for a B share is SEK 296.30. The warrants can be exercised to subscribe for shares as of 1 May 2019 up to and including 15 December 2019.

 

Series 2 Incentive Programme (2017/2020)

Total subscribed warrants amounted to 196,200 and the price per warrant was SEK 16.60. The issue price for a B share is SEK 485.10. The warrants can be exercised to subscribe for shares as of 1 May 2020 up to and including 15 December 2020.

 

Series 3 Incentive Programme (2018/2021)

Total subscribed warrants amounted to 193,500 and the price per warrant was SEK 17.80. The issue price for a B share is SEK 502.00. The warrants can be exercised to subscribe for shares as of 1 May 2021 up to and including 15 December 2021.

 

Pensions

The retirement age for the President and CEO and other senior executives is 65. The President and CEO’s pension premium amounted to 24% (24) of pensionable salary, and follows a defined contribution pension scheme. Variable remuneration does not qualify as pensionable income.

Other senior executives have defined contribution pension schemes. For 2018, the average pension premium was 22% of base salary (23). Variable remuneration does not qualify as pensionable income.

 

Severance pay

The President and CEO and other senior executives shall provide a notice period of six months. In the event of termination by the company, a notice period of 12–24 months applies. Any other income that is received during the notice period shall be deducted from the salary and other remu-neration payable during the notice period.

Both the President and CEO and other senior executives collect base salary and other benefits during the notice period. There is no remuneration after the notice period.